Ch 1: Operations and Productivity Flashcards
(27 cards)
Operations management(om) definition
The set of activities that creates value in the form of goods and services by transforming inputs into outputs
production definition
The creation of goods and services
To create goods and services, all organizations perform 3 functions
-marketing
-operations and production
-finance/accouting
Marketing
Generates demand
Starting point for sales
Production/operations
creates,produced, delivers the product
finance/accoutning
tracks how well the organization is doing, pays the bills, and collects the money
What is the supply chain
A global network of organizations and activities that supply a firm w goods and services
what are the four reasons we study OM
1- OM is one of the 3 major functions of any organizations and is related to all other business functions
2- We want and need to know how goods and services are produced
3- We want to understand what OM do
4-OM is such a costly part of an organization. Large part of the revenue a firm earns is spend on the OM function
What operations managers do? basic management functions.The management process consists
Planning
Organizing
Staffing
Leading
Controlling
10 Strategic OM Decisions
- Design of goods and services
- Managing quality
- Process and capacity strategy
- Location strategy
- Layout strategy
- Human resources and job design
- Supply-chain management
- Inventory management
- Scheduling 1
- Maintenance
What are the OM jobs (5)
Improving response time
Defining and implementing operations strategy
Improving customer service
Managing quality
Enhancing productivity
Some certifications
APICS, ASQ, ISM
Eli whitney
Credited for the early popularization of interchangeable parts
Signed a contract for 10,000 muskets and was able to commend a premium price bc of their interchangeable parts
Management should take more responsibility for
Matching employees to the right job
Providing the proper training
Providing proper work methods and tools
Establishing legitimate incentives for work to be accomplished
OM relies on contributions from
Industrial engineering, statistics, management, analytics, economics, physical sciences, IT
Services:
economic activity that typically produce an intangible object such as education or entertainment
Distinction not always clear btw goods and services
characterisitics of services
Intangible
Produced and consumed simultaneously
Unique
High customer interaction
Inconsistent product definition
Often knowledge based
Services dispersed
Quality may be hard to evaluate
Reselling is unusual
characteristics of goods
Tangible
Product can be kept in inventory
Similar products produced
Limited customer involvement
Product standardized
Standard tangible product tends to make automation feasible
Typically produced in a factory
Aspects of quality are easy to evaluate
Residual value
Service pay perception
Common perception that service industry jobs are low paying however many pay v well
Productivity:
Ratio of outputs/divided by the inputs
Labor productivity=
units produced/ labor hours used
Multifactor productivity=
output
/ labor+material+energy+capital+miscellaneous
Measurement problems
Quality- may change while the quantity of inputs and outputs remain constant
External elements- may cause and increase or decrease in productivity
Precise units of measure- may be lacking
Productivity increases are enhanced by 3 critical variables
-labor, capital, management
